Why the Future of E-Commerce Depends on Better Roads

In the cavernous basement of the Olympic Building, a line of boxy, dark brown delivery trucks rolls out to the early-morning streets of downtown Los Angeles, a chorus of tires squeaking across smooth concrete. Five floors up, in the UPS district president’s office, Noel Massie allows himself a brief moment of contentment as he feels the building vibrate around him and then fall still with the last of his fleet’s departures. This is the reassuring physical signal that his part of the never-ceasing, get-it-now economy has successfully turned one more notch on its endless loop — a cycle repeated at 2,000 similar United Parcel Service delivery hubs around the country and the world.

It is fair to say that Massie’s days are dominated by two things: trucks and minutes. He has too many of one and too little of the other, with 2 million shipments hanging in the balance every day. He is the door-to-door economy incarnate. His fiefdom is the southern half of California, from the Mexican border to Fresno, plus Hawaii, southern Nevada, and western Arizona. Massie’s purview includes an array of far-flung distribution centers, truck terminals, an international airport, and 20,000 employees. He serves a customer base of Amazon-using, iPhone-buying, one-day-delivery shopaholics, along with many of the businesses that serve and sell to them. But his relentless delivery schedule is up against a landscape of traffic and sprawl seemingly designed to make daily drop-offs and pickups all but impossible.

“I am in the business of minutes,” Massie says. “If the plane leaves at 7 AM, you either get there or somebody doesn’t get what they need in time — brain scans for someone’s surgery, tissue samples for the lab. You can’t mess that up. Minutes matter in this business….Minutes make us or break us.”

Lately those minutes are braking bad for Massie — pun intended. For all their convenience to consumers, the rise of e-commerce and the allure of same- and next-day delivery have hit the goods movement industry like a tidal wave, UPS more than most, multiplying the number of trips each day by several orders of magnitude. Big Brown’s original lucrative model has shifted from truckloads of business-to-business delivery to those same truckloads dropping off a parcel at a time at a hundred different home addresses. Traffic is the enemy in this new reality, and it’s getting worse, not better, over time.

Massie singles out two shortcomings that loom as threats to goods movement, and to car traffic as well. The first is too little national investment in infrastructure; the U.S. backlog on repairs and improvements to aging roads and bridges has reached a staggering $3.6 trillion. The second is that money spent on transportation is too often squandered on megaprojects that have great ribbon-cutting moments but don’t “fix” traffic because they are based on myth and obsolete thinking.

Case in point: The billion-dollar lane expansion of a 10-mile stretch of Interstate 405 in Los Angeles did not ease congestion. Cars and trucks now take longer to drive those 10 miles during rush hour than before the project, because adding lanes only attracts more cars. It’s called the rule of induced demand, and it’s like trying to solve overeating by loosening your belt. Meanwhile, mundane road maintenance is delayed, adding to the estimated $124 billion annual damage to the national economy wrought by traffic jams. Another case in point: Just one small, poorly maintained bridge on Interstate 10 in Hell, California (you just can’t make this stuff up), cost the trucking industry $2.5 million per day in delays and extra fuel costs after it washed out in a storm. That was just one bridge in a nation with 61,000 of them in as bad or worse condition as the bridge to Hell.

Spending to maintain the transportation system we have would seem to be an essential part of any strategy to keep traffic from getting worse. But are there ways to make it better that actually work — and without breaking the bank? Turns out there are, and because goods movement and people movement share the same space, solving one helps the other. Here are four ways to ease traffic.

Pay your own way. It’s time to end the gas tax, which hasn’t been raised at the federal level since 1993 and now only covers half of transportation spending. Replace it with a user fee for major highways that goes up at peak times and drops at off-peak times, just as electricity is priced in many parts of the country. Half the trips during rush hour are not work related and so could be shifted to other times. Congestion pricing provides the incentive that’s now missing to make that shift. Presto: Rush hour would be smooth sailing. Just don’t call it what it is: a toll. The change requires very little infrastructure investment beyond electronic toll scanners and monthly billing systems, and will benefit both individual drivers and goods movement.

Time shift. This is a no-brainer, and it doesn’t have the public toxicity of the word “toll.” Either through voluntary program or tax incentives, persuade businesses in major employment centers to stagger work start and finish times during the week. Letting just 10% of total commuters work at home one day or even a half day per week would have a dramatic effect on congestion. These are essentially cost-free measures that would be far more effective than adding lanes.

Convert carpool lanes to goods movement or transit-only lanes. Carpool lanes are a failure. Fewer than 9% of commuters carpool, less than half what it was 35 years ago. Converting some of those 3,000 miles of carpool lanes to dedicated big-rig lanes in major goods movement corridors would provide a much bigger bang for the buck, particularly in the chronically congested highways connected to the nation’s major ports and rail hubs. As for transit, it’s only attractive to car owners when it gets them there faster than driving. In major traffic nightmare areas such as New York, Los Angeles, Houston, DC, the Bay Area — you get the idea — turning HOV lanes into bus-only high-speed lanes would be a cheap alternative to building new rail systems, particularly in partnership with ride-share companies (as Lyft proposes) to solve the first-mile-last-mile problem. Down the line, automation will allow buses to operate like virtually linked trains at a fraction of the cost of rail. This would be particularly attractive as suburban conduits to major airports.

Recognize that some traffic congestion is good. Traffic jams on major highways and arterials is bad. But traffic in major business zones — downtowns, central areas — is good. It is evidence of economic activity, commerce, shopping, and recreation; it signals that people want to be there. Major cities and small towns should slow traffic on selected streets in such areas, adding pedestrian and bike protections to further stimulate economic activity.

What’s needed is a clear differentiation between “streets” — which are primarily public space and engines for creating wealth — and “roads” — which are conduits to get people and goods from point A to point B as quickly as possible. The current strategy is to create what Charles Marohn of the nonprofit Strong Towns calls “stroads.” Stroads are 40-plus-mile-per-hour multilane avenues that try to be conduits and centers of commerce — a terrible hybrid because stroads serve neither purpose well and are a major contributor to pedestrian fatalities. Keeping the two distinct will shift congestion to the areas where it’s actually desirable while keeping other thoroughfares speedy and safe.